Methods for quick sale? Inherited property

Methods for quick sale? Inherited property

Member since 2020 · 10 posts · 1 vote

I'm wondering if there are any paths to a quick sale in the commercial real estate world?

I've inherited a commercial property and have been dealing with it for the last year and really don't enjoy it.  My family has decided it is time for the place to go - the sooner the better.  It's cash flow positive and is a great building for someone to own.  I don't live near the property and  I resent the time it takes monthly to deal with it.  I realize I could farm some of that out to a property manager, but I just want to be done with it.  

I've spoken to a few realtors and they have each given me a price point of 1.25-1.45 million.  They have also told me that it would typically take 6 months to a year to complete the sale with the inspection period, time on the market, etc...  I don't want to own the property for the next year.  

Are there places that I can list the property or advertise, without a realtor, for a quick sale, knowing I would be offering a discount in exchange for a rapid settlement?  If I reduced the price to 1million, it would be almost a 10% cap rate, with leases in place, and the ability to expand and double the square footage if desired.  I feel like that's a lot of upsides and I should be able to find the right buyer, but I don't know how to do it.  This isn't my passion or a field I've ever been part of. 

If I list with a realtor for a discount and pay 100k in fees (commission, taxes, closing, deed, etc.) then it just hurts my ability to walk away since there is a mortgage left on the property, though much less than either asking price.  

This is the long way of asking - is there a place to sell by the owner and offer a discount for a quick settlement, if maximizing my cash return isn't my first priority?

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Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
5y

Find out if your mortgage on the building is assumable, so that a buyer could take it over.

Actually, since the loan was probably guaranteed by the person that passed away, the lender will jump at someone assuming the loan. 

Why is this important? Because if a buyer doesn't have to get their own mortgage on the property, it will bypass the environmental inspection, appraisal, etc. - speeding up the closing timeline.

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  • Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    5y

    The Quickest way, and the way to Net more from the sale, is to list it with a commercial broker, who used Costar. 
    You will get many times more potential Real buyers. Vliding times, due diligence periods, etc aren’t going to be longer with an agent. Also, agents vet their buyers so you’ll be less likely to tie it up with someone who can’t really buy. 
    Expect to pay 5% or so in brokerage fees. 

  • Investor · Lake Worth, FL · Member since 2016 · 233 posts · 140 votes
    5y

    @Dave Wittnauer Another way is TenX, you list for auction, sortof like ebay for commercial real estate. You provide the due diligence and terms and people bid on it wirh a deadline.

    I haven't used it myself but it seems like a good fit for you.

  • Investor · Lake Worth, FL · Member since 2016 · 233 posts · 140 votes
    5y

    @Ken Naim also contact local CRE brokers they usually have a list of buyers ready to jump on great deal.

  • Rental Property Investor · Nyc, NY · Member since 2016 · 62 posts · 26 votes
    5y

    @Dave Wittnauer

    I’d suggest you ask your accountant , trusted financial advisor or lawyer if they know a local investor who might be interested. Where is the property?

    . .

  • Rental Property Investor · Indianapolis, IN · Member since 2020 · 562 posts · 554 votes
    5y

    @Dave Wittnauer sounds like hiring a property manager will solve all of your problems. Get a PM on board to handle all the day to day BS. Then get it listed. You are leaving a ton of money on the table if you just dump it for cheap.

  • Investor / Mentor / Contractor · Arcadia, CA Buying Out of State · Member since 2015 · 655 posts · 623 votes
    5y

    @Dave Wittnauer What city? I would look up recent commercial property sales in the past 2 years in your area. Find out who buyers are. Send them direct messages that you are selling off-market. Spend time on this and not on property management and you’ll achieve your goal.

  • Member since 2020 · 10 posts · 1 vote
    5y
    Originally posted by @Account Closed:

    @Dave Wittnauer sounds like hiring a property manager will solve all of your problems. Get a PM on board to handle all the day to day BS. Then get it listed. You are leaving a ton of money on the table if you just dump it for cheap.

     Thanks for the message.  If I pay the manager 10%, and am still paying for repairs, etc. as they arise, I'm not really in an advantageous financial position.  

    There's a high-interest mortgage that I inherited as well.  I could definitely refinance to a better rate, and make more money monthly, but the fees to refinance don't make sense if my goal is to be finished owning the place as soon as possible.  

    If you told me I could sell today and be finished owning it, or sell in 6 months and make 200k, I'd sell today.  Money, to me, isn't worth being unhappy.  

  • Member since 2020 · 10 posts · 1 vote
    5y
    Originally posted by @Ken Naim:

    @Ken Naim also contact local CRE brokers they usually have a list of buyers ready to jump on great deal.

     I have to sign on for 6 months with them to get access to the list and I'm not prepared to do that yet.  

  • Rental Property Investor · Indianapolis, IN · Member since 2020 · 562 posts · 554 votes
    5y

    @Dave Wittnauer sounds like you know what you are doing and have figured out some options. If the property is weighing on you, then probably best to unload it. I’m sure there are plenty of people on BP that can help.

    Best of luck to you!!

  • Member since 2020 · 10 posts · 1 vote
    5y
    Originally posted by @Account Closed:

    @Dave Wittnauer sounds like you know what you are doing and have figured out some options. If the property is weighing on you, then probably best to unload it. I’m sure there are plenty of people on BP that can help.

    Best of luck to you!!

     Thanks.  I don't know if I know what I'm doing, but I am trying to fake it for now :-)

    The property is definitely weighing on me. This isn't a field I have ever been part of and to jump into a building with a bunch of tenants, etc.. has been overwhelming and continues to be. I didn't know I was inheriting this property and had never even visited it before. It was a sudden, and unexpected death and I didn't have keys, had never met a tenant before. I went from living my life with my wife and kids to this building, an LLC, and a tough time.

    It probably sounds crazy, but I just want to get back to spending time with my family.  We went away this summer and I spent the whole vacation worried that something would happen and I'd have to return.  

  • Rental Property Investor · Indianapolis, IN · Member since 2020 · 562 posts · 554 votes
    5y

    @Dave Wittnauer totally understand, and so sorry for your loss. It’s never easy to walk into something like that.

    You may reconsider the property manager, at least temporarily until you can get it sold. That way you don’t have to deal with the day to day and maybe can gain some perspective and reduce your stress from the property.

  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
    5y

    Find out if your mortgage on the building is assumable, so that a buyer could take it over.

    Actually, since the loan was probably guaranteed by the person that passed away, the lender will jump at someone assuming the loan. 

    Why is this important? Because if a buyer doesn't have to get their own mortgage on the property, it will bypass the environmental inspection, appraisal, etc. - speeding up the closing timeline.

  • Investor · Lake Worth, FL · Member since 2016 · 233 posts · 140 votes
    5y

    @Dave Wittnauer Not neccessarily. They will try to get an exclusive deal but say you are looking for an off market deal. I've bought several "unlisyed" deals like this.

  • Member since 2020 · 10 posts · 1 vote
    5y
    Originally posted by @Drew Sygit:

    Find out if your mortgage on the building is assumable, so that a buyer could take it over.

    Actually, since the loan was probably guaranteed by the person that passed away, the lender will jump at someone assuming the loan. 

    Why is this important? Because if a buyer doesn't have to get their own mortgage on the property, it will bypass the environmental inspection, appraisal, etc. - speeding up the closing timeline.

     Thanks - great info.  I've called the bank and am waiting on a reply to find out if that's possible. 

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